Afrox is to invest R750-million on a new state-of-the-art commercial hub in KwaZulu-Natal and on a new air separation unit (ASU) to service customers in the Eastern Cape, the company announced today.
“This capital investment is the first tranche of a R1.5-billion programme to boost customer service levels to support our growth strategy in South Africa and enabling us to capture our fair share of business in the emerging markets of sub-Saharan Africa,” said Afrox Managing Director, Brett Kimber.
Kimber confirmed that R500m of that will be the price tag to relocate its Durban operations to a new centralised business campus to be developed at Tongaat Huletts’ new Cornubia Industrial and Business Estate (CIBE), near Umhlanga and the King Shaka International Airport.
This 111,000 square metre site will be the single biggest project Afrox has ever undertaken in South Africa and will be a benchmark for parent company, The Linde Group’s industrial gases operations worldwide.
The new site will be the most advanced facility of its kind and will be Afrox’s largest single filling site on the African continent, filling an average of 5,000 cylinders a day, with the capacity to increase production by up to 40%.
“This is about meeting the needs of customers and recognising and applying market trends to the best benefit of all stakeholders in using eco-friendly designs and technologies,” said Kimber.
The new facility will accommodate Afrox’s existing industrial and medical gases filling operations, currently located at Maydon Wharf, and two other operations presently based in Pinetown and Seaview.
Added Kimber: “A factor that influenced this investment is the imminent redevelopment of the Port of Durban’s infrastructure, which includes major reconstruction activities at Maydon Wharf, where we have been conducting our industrial and medical gas filling activities for many years.”
A further R250m of the R1.5 billion investment programme has been earmarked for a 150 tons-per-day ASU to service customers in Port Elizabeth, and the surrounding region. The stand-alone plant will be located on an established site within the Coega Industrial Development Zone, South Africa’s foremost investment hotspot.
Said Kimber: “Afrox has been planning this investment in the Eastern Cape for a while now, considering the availability of supplies and the challenges posed by having to reliably trunk product to customers by road.”
Currently, demand for industrial gases in the Eastern Cape can only be satisfied by trucking in product by road tanker, sometimes over distances ranging from 400kms to more than 1,100kms, with all the associated risks around South Africa’s annual wage negotiations and road safety issues.
“Afrox is a proudly South African company and we have made our intentions clear to customers in the Eastern Cape that we will be investing in the future of their businesses and this announcement is Afrox delivering on that promise, to the tune of R250-million,” confirmed Kimber.
“We will be breaking ground next year and the plant will be in production by 2014, which allows us to speedily ramp up our service to existing and new Afrox customers, reducing cost-to-serve and ensuring security of supply for the region.”